Other Expenses

9 Months Ended

Sep. 30, 2024

Other Income and Expenses [Abstract]

Other Expenses

OTHER EXPENSES

Our other expenses consist of the management and incentive fees we pay to our Manager and our general and administrative expenses.

Management and Incentive Fees

Pursuant to a management agreement between our Manager and us, or our Management Agreement, our Manager earns a base management fee in an amount equal to 1.50% per annum multiplied by our Equity, as defined in the Management Agreement. In addition, our Manager is entitled to an incentive fee in an amount equal to the product of (i) 20% and (ii) the excess of (a) our Core Earnings (as defined in our Management Agreement) for the previous 12-month period over (b) an amount equal to 7.00% per annum multiplied by our Equity, provided that our Core Earnings over the prior three-year period is greater than zero. Core Earnings, as defined in our Management Agreement, is generally equal to our GAAP net income (loss), including realized gains and losses not otherwise recognized in current period GAAP net income (loss), and excluding (i) non-cash equity compensation expense, (ii) depreciation and amortization, (iii) unrealized gains (losses), (iv) net income (loss) attributable to our legacy portfolio, (v) certain non-cash items, and (vi) incentive management fees.

During the three and nine months ended September 30, 2024, we incurred $18.6 million and $56.3 million, respectively, of management fees payable to our Manager compared with $18.8 million and $56.0 million, respectively, during the same periods in 2023. During the three and nine months ended September 30, 2024, we did not incur any incentive fees payable to our Manager, compared to $10.1 million and $36.8 million, respectively, during the same periods in 2023.

As of September 30, 2024, we had accrued management fees payable to our Manager of $18.6 million. As of December 31, 2023, we had accrued management and incentive fees payable to our Manager of $26.3 million.

General and Administrative Expenses

General and administrative expenses consisted of the following ($ in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Professional services	$	3,753	$	3,038	$	11,709	$	9,579
Operating and other costs	1,686		1,357		5,044		5,383
Subtotal(1)	5,439		4,395		16,753		14,962
Non-cash compensation expenses
Restricted class A common stock earned	7,728		7,434		23,400		22,418
Director stock-based compensation	256		172		658		508
Subtotal	7,984		7,606		24,058		22,926
Total general and administrative expenses	$	13,423	$	12,001	$	40,811	$	37,888

(1)During the three and nine months ended September 30, 2024, we recognized an aggregate $125,000 and $668,000, respectively, of expenses related to our Multifamily Joint Venture. During the three and nine months ended September 30, 2023, we recognized an aggregate $230,000 and $826,000, respectively, of expenses related to our Multifamily Joint Venture.